Oftel's new safety blanket

Cable firms slip through new telco watchdog net

Oftel published its Open Access Regulations this week, which describe how it assesses whether companies' are misusing monopoly positions.

But on closer inspection, the regulations seem to do little to protect people from de facto monopolies.

The new regulations offer 'blanket protection' to individuals by demanding 'companies with market power' open up their networks to other smaller operators, thereby creating fair competition.

But surprisingly, under a test described in the OARs, BT and cable and satellite companies are not considered to have 'market power'.

Because the test laid out in the OAR document is assessing country-wide competition, it doesn't address the carving up of areas into cable company territories.

"On applying the test we decided it was not appropriate to enforce the regulations on cable companies," said a spokesperson at Oftel. "But this does not mean that we will not impose them in the future."

"They can't say cable doesn't have a strong position," said Michael Dornan of research firm Gartner. Dornan has spent years tracking the positions of companies such as cable firms. "In a cabled area where you have a choice between BT and cable, cable companies can offer telephony and TV which BT can't."

Essentially this is about provision of data services, such as ADSL. Dornan's point is that just because cable firms have fewer customers than Sky Digital, it doesn't mean they are comparable. Only cable firms, such as NTL or Telewest, can offer phone, TV and data services combined.

According to a study by research group Gartner, 3.88 million homes (15 percent) currently subscribe to cable.

But in each local area there appears to be no choice of provider. For example, in Hatch End in Middlesex the only cable service available is from NTL. So cable companies seem to have a monopoly at a local level.

"Just because they are the only cable company under our test does not mean they have market power," said an Oftel spokesperson. The test states that to have 'market power' the company must have the power to raise prices consistently and profitably above competitive levels.

NTL confirmed it had raised its prices this week but would not comment on the regulations, although it said it had been made aware of them.

"Prices have gone up at the same rate across the board," said a spokesperson at NTL. "We feel our prices are competitive."